30 June 2009

(For Spanish, scroll down)It's quarterly forecast time at TransEconomics, which means time to revisit the geopolitical assumptions that embed our forecast for the global economy and its impact on Mexico.

To that end, this morning I called my friend Jenik Radon, Adjunct Assistant Professor of International and Public Affairs at Columbia University, and left a simple message on his voice mail: "Jenik, this is Jenny. What does North Korea want?"

Jenik's answer came in a subsequent phone interview.

Jenny, you've asked a very hard question. North Korea cannot be analyzed in traditional terms and accordingly does not act in any traditional way. It has proven to be unpredictable in its actions, and thus there is no clarity as to its goals. It's one thing to shoot a missile, another to conduct a nuclear test, and a third thing altogether to threaten to aim a missile at Hawaii. This does not make sense.

What do I read in this? Not any specific goals but a statement: "We are here. We can stand up. We want attention and we will get it—as a player equal to all. So don't disregard us. No one can dictate to us." Status seems to be the prime motivator. Certainly economics is not.

Moreover it must always be kept in mind that, although North Korea is dependent on China, North Korea is neither interconnected to nor engaged with the rest of the world. As long as China is willing to tolerate unconventional behavior, this gives North Korea a sense of security.

So this is not about money? North Korea's aim is not extortion but attention getting?

Precisely.

Can you expand on North Korea's relationship with China? How does it affect North Korea's behavior?

North Korea can behave this way only as long as its main benefactor does not really object. Until North Korea's May 25 nuclear test, China, although periodically annoyed by North Korean actions, had not seriously objected.

So perhaps my original question should have been, what does China want?

Before I answer that, note that China voted with the United States this time on the National Security Council. That was highly unusual. Stunning. China's tolerance clearly has limits, and North Korea this time went too far.

Now to your question. China gains a few things from North Korea's actions. One is a way to signal feelings to Japan. Japan has still not apologized for Nanking and the commission of other World War II atrocities. Until remorse is shown by Japan, China and Japan cannot be true friends.

In short, as long as North Korea really only annoys Japan, North Korea acts within some sort of limits.

Second, it prevents a unified Korea, which eventually would be stronger nation than today's divided one.

Granted, that would take time. Look at how long it is taking East and West Germany to re-integrate fully, and West Germany was much wealthier than South Korea is today.

In the case of the Koreas, the gap is not just economic. It's also cultural. I reckon it would take 50 years for the two cultures to come together. Think of the extreme isolation of the North and the lack of the development of any functioning economic system in the North. Sadly, one need only look at how difficult it has been for North Korean refugees to integrate into the social and economic systems of South Korea.

But China takes the long view. One Korea in the long view would be a strong economic neighbor and and competitor. So two Koreas are better than one.

China of course should view it differently. You are only as strong as your weakest link. And an unpredictable and poor neighbor, here North Korea, is simply a weak link and is costly. It weighs on, burdens, China’s relations with the USA, and forces China’s to guard its borders to prevent a rush of millions of hungry refugees.

Third, through continuous efforts such as the Six-Party Talks, China can pursue a peace policy that deflects attention from the two-China issue: Taiwan – Mainland China.

What's the downside for China?

China likes foresight and predictability. This explains its recent loss of patience with North Korea. China now needs to worry that North Korea could become even more unpredictable.

Any thoughts on Kim Jong-woo, Kim Jong-il's apparent successor?

He'll likely take over as head of state but won't have much control at first. Real control will rest in the hands of his mentor in the old oligarchy, Jang Song-taek.